Utility-based data marketplaces

In "Computer Mediated Transactions" by Hal Varian, Varian offers an insightful look at how and why innovation has accelerated so rapidly within the realm of the internet. The piece offers some interesting insight regarding the historical development of the internet starting in the 1990’s, but it also makes some prescient predictions about the future. Especially given that it was written in 2010, I found the ‘Deployment of Applications’ section particularly compelling given some of the developments that have taken place since the time of this article’s writing. Most notably, Varian states “in the future it is likely that there will be a number of cloud computing vendors that will offer computing on a utility-based model. This production model dramatically reduces the entry costs of offering online services and will likely lead to a significant increase in businesses that provide such specialized services (Ambrust et al. 2009)” (Varian, 2010). Although a number of the established cloud service providers (Google, Amazon, etc.) have made efforts in this space, I believe that Snowflake is perhaps the best example of the computing future described by Varian. 

Snowflake was a private company founded in 2012 and that later had one of the most historic technology IPOs ever in 2020. Snowflake offers cloud based data storage and analytics that has become known as ‘data warehouse as a service.’ What is perhaps most interesting about Snowflake’s capabilities and business model is their ability to decouple storage from compute. Customers pay next to nothing to store their data on Snowflake servers, and are charged on a consumption basis as they run queries on data. More importantly, Snowflake has created a data marketplace such that Snowflake customers can share (or sell) data with one another, allowing small and large businesses alike to join various datasets both internally and externally. In an age where data has become a strategic differentiator for nearly every business, the ability to democratize data access through shared infrastructure is quite compelling. However, the question remains whether shared infrastructure and utility based pricing will in fact lead to a more democratic data ecosystem. 

I agree with the assertion by Varian that utility based production models are an exciting future, however I question the implication that this will be a net benefit to data consumers. In the past decade, we have seen news and communications democratized on the internet through businesses like Facebook and Twitter. However, companies like Facebook have struggled to offer a democratic communications utility while also bearing the responsibility of what is shared on their platform (often at the determinant of consumers). I wonder to what extent this offers a cautionary tale for data marketplaces like Snowflake. In the near term, businesses are likely to see lower costs of data analysis and easier access to data they may not have had the ability to query before. But if Snowflake were to grow the way Facebook did, at what point will they begin to lose control / insight over what types of data is shared and with whom? More importantly, if we believe data computing is in fact a utility, to what extent do we want such a utility completely controlled by one (or a select few) private companies?


academics study skills MCAT medical school admissions SAT expository writing college admissions English MD/PhD admissions GMAT LSAT GRE writing strategy chemistry physics math biology ACT graduate admissions language learning law school admissions test anxiety interview prep MBA admissions academic advice premed homework help personal statements AP exams career advice creative writing MD study schedules summer activities Common Application history test prep philosophy computer science secondary applications organic chemistry economics supplements PSAT admissions coaching grammar law statistics & probability psychology ESL research 1L CARS SSAT covid-19 legal studies logic games reading comprehension dental admissions mathematics USMLE Spanish calculus engineering parents Latin verbal reasoning DAT case coaching excel mentorship political science French Linguistics Tutoring Approaches academic integrity chinese AMCAS DO MBA coursework PhD admissions Social Advocacy admissions advice biochemistry classics diversity statement genetics geometry kinematics medical school mental health quantitative reasoning skills time management Anki English literature IB exams ISEE MD/PhD programs algebra algorithms art history artificial intelligence astrophysics athletics business business skills careers cold emails data science internships letters of recommendation poetry presentations resume science social sciences software engineering study abroad tech industry trigonometry work and activities 2L 3L Academic Interest DMD EMT FlexMed Fourier Series Greek Health Professional Shortage Area Italian Lagrange multipliers London MD vs PhD MMI Montessori National Health Service Corps Pythagorean Theorem Python STEM Sentence Correction Step 2 TMDSAS Zoom acids and bases amino acids analysis essay architecture argumentative writing brain teaser campus visits cantonese capacitors capital markets cell biology central limit theorem chemical engineering chess chromatography class participation climate change clinical experience community service constitutional law consulting cover letters curriculum demonstrated interest dental school distance learning electricity and magnetism enrichment european history executive function finance first generation student freewriting fun facts functions gap year genomics harmonics health policy history of medicine history of science hybrid vehicles hydrophobic effect ideal gas law induction information sessions institutional actions integrated reasoning intern international students investing investment banking lab reports logic mandarin chinese mba mechanical engineering medical physics meiosis microeconomics mitosis music music theory neurology neuroscience office hours operating systems organization pedagogy phrase structure rules plagiarism pre-dental proofs pseudocode psych/soc quantum mechanics resistors resonance revising scholarships school selection simple linear regression slide decks sociology software stem cells stereochemistry study spots synthesis teaching technical interviews transfer typology units virtual interviews writer's block writing circles